ICRIER Survey Finds Inability To Access Markets, Retain Customers Among The Top Challenges For MSMEs

The survey found that other challenges for the MSMEs included the physical infrastructure bottlenecks, lack of access to credit and skilled labour, and issue of delayed payments. 

Micro, small, and medium enterprises (MSMEs) stated the inability to access markets, retain customers, and successfully market their products among the major challenges in a latest survey released on Monday. The survey, released by ICRIER, examined a total 2,007 MSMEs between November 4, 2022, and January 20, 2023. Among the total sample, 65 per cent of the companies surveyed were micro enterprises, 19 per cent were small, and the rest 16 per cent were medium enterprises. 

The survey, by the Indian Council for Research on International Economic Relations (ICRIER), stated in it’s findings that MSMEs, which use e-commerce platforms for sales, typically tend to be operated and owned by younger and more educated individuals. A majority share of export-oriented MSMEs were found to be integrated with e-commerce platforms, compared to non-exporting firms, indicating a productive relationship between the companies’ export inclination and e-commerce adoption, reported PTI.

The report further stated that on average, integrated MSMEs tend to be better off than non-integrated ones on crucial performance indicators, like turnover, profitability, and share of employment benefits. When the survey was conducted, 1,005 firms were already integrated with e-commerce platforms, while the rest 1,002 were not integrated. 

The survey suggested that collaboration with e-commerce platforms helps MSMEs increase their access to markets and also enhances their access to finance, effectively removing major obstacles to their growth. Therefore, the survey underlined the need for digital transformation for the MSMEs to grow effectively and inclusively. 

The report further stated that the majority of the surveyed firms recognised the scope of e-commerce to help them increase their reach to cover a wider geographical base. However, the survey found that to enable the integration of MSMEs with e-commerce platforms, government policy support was important. 

In addition to obstacles regarding access to markets, the surveyed MSMEs pointed out many other challenges with respect to the physical infrastructure bottlenecks, lack of access to credit and skilled labour, and issue of delayed payments. 

To find a solution to these challenges, the government at the central and state levels has implemented multiple schemes to provide financial assistance, access to technology and upgradation facilities, infrastructure development, skill development, and training, the report noted. These measures include the Emergency Credit Line Guarantee Scheme, Credit Guarantee Fund Trust for Micro and Small Enterprises, the Credit Linked Capital Subsidy Scheme, the MSME Sarthak Scheme (Karnataka), and the Rural Craft and Cultural Hubs (West Bengal), among others. 

The survey also stated that the respondents firmly believed that there was a need to consolidate and rationalise these schemes. MSMEs also underlined the need for improved coordination between the central and state governments and stressed for a detailed MSME policy to allow companies to find policy incentives and programmes in a single place. 

The survey included MSMEs across six product categories, namely sports goods (16.7 per cent), toys (15.7 per cent), processed and preserved food products (16.9 per cent), apparel (17 per cent), furniture (17.6 per cent), and handicraft products (16.1 per cent). These firms were spread across 11 cities, namely, Ahmedabad, Bhubaneshwar, Delhi, Jaipur, Lucknow, Ludhiana, Jalandhar, Agra, Meerut, Saharanpur, and Chennai.